恒生银行(00011) - 2022 - 中期财报

Financial Performance - Net operating income before expected credit loss changes and other credit impairment charges decreased to HKD 14,944 million, down 13.4% from HKD 17,326 million in the same period last year[2]. - Operating profit fell to HKD 5,533 million, a decline of 45.5% compared to HKD 10,223 million in the previous year[2]. - Profit attributable to shareholders decreased to HKD 4,704 million, down 46.5% from HKD 8,767 million year-on-year[2]. - The average return on ordinary shareholders' equity dropped to 5.2%, down from 9.9% in the previous year[2]. - Earnings per share dropped by 48% to HKD 2.31, reflecting the challenging operating environment[23]. - The company reported a net profit of HKD 4,704 million for the period, contributing to a total comprehensive income of HKD 3,224 million[171]. - The total comprehensive income for the period attributable to shareholders was HKD 3,224 million, down from HKD 8,320 million in the previous year[169]. - The pre-tax profit for the six months ending June 30, 2022, was 5,439 million HKD, a decrease of 47.3% compared to 10,298 million HKD for the same period in 2021[175]. Asset and Liability Management - The bank's total assets increased to HKD 1,846,914 million, up from HKD 1,820,185 million at the end of the previous year[3]. - Customer deposits rose by HKD 19 billion, or 1%, to HKD 1,358 billion compared to the end of 2021[20]. - Total liabilities increased to HKD 1,664,344 million, compared to HKD 1,635,769 million, marking a rise of 1.7%[170]. - The bank's total capital as of June 30, 2022, was HKD 136,307 million, a slight decrease from HKD 138,758 million as of December 31, 2021[139]. - The total amount of loans and related credit commitments was HKD 365.054 billion, with a net amount of HKD 364.892 billion after expected credit loss provisions[130]. Credit Risk and Provisions - Expected credit loss provisions increased by HKD 17.57 billion to HKD 20.96 billion, primarily related to the mainland commercial real estate sector[19]. - The expected credit loss for customer loans was HKD (8,678) million as of June 30, 2022, compared to HKD (6,928) million as of December 31, 2021[78]. - Total impaired loans increased by HKD 8.595 billion, or 82%, to HKD 19.024 billion, with the impaired loan ratio rising to 1.92% from 0.69% a year earlier[29]. - The expected credit loss provision recorded in the income statement for the period was a net charge of 2,092 million[113]. - The expected credit loss provision for the mainland China commercial real estate portfolio was HKD 3.996 billion as of June 30, 2022, compared to HKD 2.820 billion on December 31, 2021[133]. Revenue Streams - The company's net interest income across all business segments recorded growth despite a challenging environment, with a significant increase in the number of target customers, particularly among young and affluent clients[10]. - The company's insurance premium income net increased by 78% due to strong customer response to new insurance products that provide both short-term and long-term protection[13]. - The company's wealth management business revenue decreased by HKD 2.633 billion, a decline of 57% year-on-year, primarily due to adverse market conditions affecting life insurance[14]. - The sales of ESG wealth management products increased by 3% year-on-year, while the asset size of ESG fund management rose by 59%[13]. - The company achieved a 175% year-on-year increase in green loans and sustainable development performance-linked loans, amounting to HKD 17 billion[15]. Operational Efficiency and Investments - Operating expenses rose by 8% year-on-year to HKD 73.13 billion, with a focus on investments in technology, staff, and brand[22]. - The company aims to enhance employee skills through a comprehensive data mastery training program to improve operational efficiency[7]. - The company launched over 350 digital innovation services and enhancements, including mobile ticketing services for both commercial and personal clients[10]. - The company is investing in information technology systems to improve service reliability and resilience[60]. - The company continues to enhance risk management practices in response to the ongoing COVID-19 pandemic and geopolitical tensions[61]. Market Conditions and Economic Outlook - The company has identified significant geopolitical risks, including the impact of the Ukraine conflict and the COVID-19 situation in Asia, as major sources of uncertainty[87]. - The consensus central scenario predicts GDP growth rates of 1.1% for Hong Kong and 4.5% for mainland China in 2022, with a gradual slowdown expected in 2023[90]. - The unemployment rate is projected to remain low, with averages of 4.4% for Hong Kong and 3.8% for mainland China in 2022[90]. - Inflation rates are expected to peak in 2022, with a return to central bank targets by the end of 2023, averaging 2.3% for Hong Kong and 2.2% for mainland China in 2022[90]. - The management's assessment of economic conditions reflects a high level of uncertainty regarding inflation and its impact on real income and GDP growth[97].